TSX Clears 33,000 for First Time as Tech and Industrial Sectors Rise

The S&P/TSX Composite Index crossed the 33,000 mark for the first time on Thursday, reaching 33,014 as tech and industrial names gained traction. The index has risen 3.8% year-to-date, outpacing the S&P 500's 1.2% gain. Tech and industrial stocks have led the charge, driven by strong earnings and growth forecasts in the sector.

Global technology demand reached a record high in Q4, with annual contract value (ACV) hitting $34.3 billion, fueled by the 26% growth in XaaS (Everything as a Service) spending. Infrastructure-as-a-service (IaaS) saw the most significant increase at 32% year-on-year. Analysts noted that AI demand is a core driver of this growth.

Taiwan Semiconductor Manufacturing Co. (TSMC) reported fourth-quarter revenue exceeding NT$1 trillion (approximately $33.1 billion), surpassing analyst expectations. The company also announced plans to increase 2026 capital expenditure to between $52 billion and $56 billion, significantly higher than the previous market consensus of $48-50 billion. This move signals confidence in the long-term demand for AI and advanced semiconductor manufacturing.

Why Did This Happen?

The surge in tech and industrial sectors is attributed to robust demand for AI infrastructure, driven by TSMC's strong performance and forward guidance. The company's aggressive capex plan suggests a long-term bullish outlook for the AI sector. Analysts have cited TSMC's cautious approach to capacity expansion as a sign of durable AI demand, especially given the cyclical nature of the chip industry.

Market watchers also point to broader trends in the technology services and software sector. The ISG Index™ reported that XaaS growth remains a key driver of the global technology market, with infrastructure services leading the charge. AI workloads, data platform expansion, and enterprise cloud modernization are cited as major contributors.

What Are Analysts Watching Next?

Analysts are closely monitoring TSMC's spending plans for 2026 and the overall trajectory of AI demand. The company's capital expenditure increase includes major commitments in the U.S., particularly for a new facility in Arizona. This has led to speculation that other chipmakers and AI-related sectors could benefit from the broader investment environment.

In the broader market, Canadian stocks have outperformed their U.S. counterparts due to investor concerns over U.S. equity volatility and policy uncertainty. The Canadian dollar is seen as undervalued against the U.S. dollar, and analysts suggest hedging U.S. currency exposure could strengthen portfolio performance. The Trump administration's criticism of the Federal Reserve and its chair has also contributed to a "sell the U.S." trade, pushing investors toward calmer markets.

Precious metals, especially silver, are also under scrutiny. Silver prices hit record highs in early 2026, driven by industrial demand and investment flows. Analysts at Deutsche Bank and State Street have highlighted the shift in central bank reserves from U.S. Treasuries to physical gold, a trend that could continue into 2026. Silver's surge is also attributed to its role in AI data centers, renewable energy, and high-tech manufacturing.

Investors are also tracking the performance of key tech and industrial stocks, including TSMC and Lam Research, which saw early market gains. Lam Research benefited from upward revisions to wafer fabrication equipment spending forecasts, which could lead to a $10B to $15B increase in spending. This shift is expected to benefit foundries, logic, and DRAM sectors.

The strong performance of the TSX has also been attributed to gains in precious metals and industrial commodities. Silver mining stocks, in particular, have attracted attention, with companies like Pan American Silver and Hecla Mining offering exposure to rising prices and industrial demand. Analysts suggest that silver miners are well-positioned to benefit from structural supply deficits and growing demand from green technologies.

Market participants are also watching for further developments in the U.S. economy, particularly consumer spending and Federal Reserve policy. Despite outperformance in the Canadian market, some strategists remain optimistic about U.S. equities, citing resilient consumer demand and potential GDP growth in the coming quarters.

TSMC's guidance and the broader market dynamics suggest a positive outlook for the AI and technology sectors. As capital-intensive projects continue to gain momentum, investors are likely to focus on earnings surprises, capex plans, and global supply chain developments. Analysts at JPMorgan and Hargreaves Lansdown have emphasized the potential for continued growth in TSMC and related industries.